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Tax on PF Interest

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Manish Jain

Software

37 Points Posted on 17 June 2023

I am calculating Tax on Taxable portion of PF contribution (more than 2.5L) for 22-23.

Do I need to consider Taxable portion of 21-22 and add that into 22-23's taxable portion. And calculate tax on accumulated amount at 8.15% ?

ClearTax website - In the subsequent years, the previous years’ accumulations of the taxable account will be brought forward, and the interest accrued on the opening balance and current years’ contribution (contribution above the threshold limit of Rs 2.5 lakh) of the taxable account shall be taxable.

Replies (4)

Quick Summary

This discussion explores the tax implications of Provident Fund (PF) contributions exceeding the £2.5 lakh threshold. It addresses how to calculate taxable interest, whether to carry forward previous years' taxable amounts, and how to handle situations where tax has already been paid on interest that EPFO later credits and deducts TDS for, to avoid double taxation.

Mahesh Shah

1175 Points Posted on 17 June 2023

First of all EPF above proscribed limits is taxable
the intrest and TDS on such excess for financial yr is reflected in 26AS/AIS
so that amounts as reflected must be taken into ac

Anil Diwan

Professional

61 Points Posted on 17 June 2023

Know about Provident Fund & Income Tax liability on withdrawn of Provident Funds

Read my blog for detailed information:

https://taxchanakya.co.in/employees-provident-fund-epf/

Manish Jain

Software

37 Points Posted on 18 June 2023

I have created a sample calculator. Can someone review ?

https://docs.google.com/spreadsheets/d/1GdwswZCWogNWm0RDGlXKlft5v0WQx0weI9T_Qut9o_E/edit?usp=sharing

Sri77

Others

58 Points Posted on 04 July 2024

Hi,

For FY 2022-23, my CA had calculated the interest that would be payable by EPFO and reported in ITR2 (AY 2023-24) and paid tax as well.

However, EPFO paid the interest only in FY2023-24 and is reflecting in 26AS. It has also deducted TDS. For this amount, I have already paid tax. How to avoid double tax?

Should we take extra pain to calculate the interest ourselves? Can we wait till EPFO credits and pay tax for the amount in the corresponding AY in which payment is made?